Minister Ahern to end eircom line-rental monopoly.

It is about time that something was done about this.

wholesale unbundling

Is this the same as unbundling the local loop?

http://www.marine.gov.ie/modules/pressreleases.asp?guid=8C3DD0B13830988953F01383097B2B28D13830978BAC7B138309800BEB11383097C63596138309800BEB113830978BAC7B1383092E3C5E|1AB955&arg=61F8EF81E253663DB42E1E253663DB42E1E2536|306160|123C2A&farg=37624641215A43640EC01215A439A4FAC1215A439A4FAC1215A4|29ED3D|17D799

This is the release but there appears to be problems in accessing it via the link so here is the text
Dublin, Wednesday, 28th January, 2004
Dermot Ahern TD, Minister for Communications, Marine and Natural Resources, today ordered the Communications Regulator (ComReg) to introduce competition on line rental pricing by the end of March.

The Minister announced that he is to issue a policy direction to ComReg to introduce by Wednesday 31st March, 2004, a wholesale line rental product single billing product - for voice and data services. Minister Ahern said he would insist that the margin between wholesale and retail rates is wide enough to drive competition.

Addressing the Joint Oireachtas Committee on Communications, Marine and Natural Resources, the Minister said the effect of this radical move would be to

Cut line rental prices to Irish consumers by allowing telecoms companies to compete against Eircom for line-rental.
Cut line rental prices by giving telecom companies the potential to undercut the Eircom price, providing Eircom with the incentive to keep prices down.
Build jobs, lower phone prices for Irish consumers, which in turn will lower inflation.
Direct ComReg to insist that the product is accessible, affordable, and available for telecoms operators.
Minister Ahern stated: If the product is not in place by the end of March and if it is not delivering verifiable competition and lower prices by the end of June, I will direct ComReg to take line rental out of the present price CAP, and to set a specific rental cap no greater than the consumer price index.

The Minister will go to consultation on the proposed policy directions within the next week.

The development of the telecoms market is clearly dependant on the input from a number of players both private and public. I am confident that the significant investment by Government and my policy directions will send a clear signal to the market that I intend to ensure that competition develops so that no operator will be in a position to operate non competitive pricing strategies in any market segment. Also, that consumers both business and residential, can go elsewhere if they are not satisfied with the range of services or prices being offered by individual operators.

Referring to the recent increase in line rental, the Minister said the publics anger was understandable. The public are angry because the price increase is well ahead of the general rate of inflation. Secondly, it has been levied on that part of the telephone service where customers have no choice Eircom is the sole operator. At the same time prices are falling in those parts of the market where the company faces competition.

Thirdly, the timing and size of the Eircom line rental price increase comes at a time when the announcement of broader financial developments in the company could reasonably be portrayed as enabling the existing shareholders to cash in their chips at the expense of the customer. This image has not been helped by the fact that shareholders took a dividend of €500 million from the company just last Summer. Of that total, the ESOP, owned by Eircom employees, benefited to the tune of over €150 million.

In these circumstances it is perhaps disappointing that leading figures in the ESOP have chosen to criticise my policies of bringing increased choice to the Irish public, particularly in terms of accelerated roll-out of broadband in the regions.

I believe that the interests of Irish consumers are not served by leaving them at the mercy of private shareholders including those representing employees - whose interests are the corporate bottom line, even if this means higher costs for consumers and slower roll-out of advanced services.

The Minister said he had no role in approving of individual price increases in the telecoms sector. That is the job of the regulator. Under the price cap mechanism, Eircom has discretion in the increase applied to individual items within the basket of services provided that the overall increase is no greater than the rate of inflation.

The Minister said the issuing of a previous policy direction to ComReg in December, 2002, had led to the introduction of flat rate Internet a commodity which now enjoys 50,000 subscribers.

Minister Ahern said initiatives launched by the Government such as the Metropolitan Area Network project - bringing broadband networks to 19 towns by the middle of this year at a cost of €64m - and the €140m scheme to connect over 80 towns with a population of 1,500 or more to broadband networks were underpinning necessary investment in new technology for the future.

ENDS

Originally posted by Moriarty
IIRC the 13.5% rate was only applicable for the actual install of equipment, it doesnt include anything else.

Were NTL not charging 13.5% on their "service" i.e. the monthly TV charge?

Hah! A talk means a good bit for a minister I reckon. Talking and not following up is one thing to a Regulator with a comfy job but another thing entirely to a Minister who's livelyhood is dependant on how trustworthy he is.

A "talk" from a minister is in real terms a lead-up to a directive, which, in the end, is just a "talk", but one which carries quite a bit of weight. Or law. Whichever.

Don't knock too soon. This guy seems to be on the ball and in all fairness BB in Ireland has moved relatively substatially since he got on the scene. Could you have seen us where we are now by O'Rourke and our friend Etain?

With what I have seen over the last year or so I would be fairly hopeful from this piece of reading that by June we will have a fair movement in line rental prices. Shít even if it is aimed high and he only gets half-way it's still an achievement.

So christ, calm it with the cynicism and lets see how it goes. There'll be plenty of time for critism after it flops. If it flops. And if it succeeds, well at least there'll be less tails between legs.